A private investor has paid €3.35 million and secured a net initial yield of 7.75 per cent on a student accommodation and retail investment in Galway.

Sarah Winters of selling agent TWM says the asset attracted domestic and international interest since it first went on the market last September, and was sold for more than its guide price of 3.2 million.

The 20 student apartments in four blocks are along Seamus Quirke Road, and were developed circa 2003. They comprise 12 three-beds and eight two-beds which gives an aggregate of 52 bed spaces.

These have achieved over 90 per cent occupancy in recent years, greatly helped by the city’s 22,500-strong student population. Additional lettings are made to the tourist trade in the summer when the academic year is over.

The investment produces a rent roll of €271,934 per annum from the 1,633.86sq m (17,587sq ft) of space. There is plenty of parking spaces to the front of the blocks and rear of the commercial units.

The apartments are about 2km from the city centre, and within walking distance of NUI Galway and University College Hospital Galway.

Given the ongoing shortage of student accommodation in Galway, the agent believes there may be room for rental growth from the investment in future years, although this will be subject to recent rent caps introduced by the Government.